This week brings promising news in the fight against patent trolls. We have written before about how a broken patent system has led to an explosion of lawsuits by patent trolls (companies that assert patents as a business model instead of creating products). In the hands of trolls, patents become a tax on innovation.
Rep. Peter DeFazio, along with Rep. Jason Chaffetz, has re-introduced the SHIELD Act (the backronym stands for Saving High-Tech Innovators from Egregious Legal Disputes) in the House of Representatives. The SHIELD Act (H.R. 845) is designed to help the innocent victims of patent trolls.
Patent trolls use the sky-high cost of litigation as a weapon. It costs millions to defend a patent lawsuit. So while a few targets—including Newegg and Twitter—have fought back and won, even large companies are understandably reluctant to spend a fortune and waste employee time fighting a lawsuit. And smaller companies, like start-ups, might not have the resources to defend a patent suit at all. So even if the troll’s claims are weak, it can pressure its victims into settlement.
The SHIELD Act will help fix this problem. Under the Act, if the patent troll loses in court (because the patent is found to be invalid or there is no infringement), then it pays the other side’s costs and legal fees. We think this proposal—which is also one of the reforms proposed at our Defend Innovation project—is a great first step.
Momentum is building for patent reform. President Obama recently acknowledged that we need new laws to deal with patent trolls. This is the perfect time to tell Congress that it needs to act.
Please join EFF in supporting the SHIELD Act by contacting Congress today.